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Chapter32 - Liability to Third Parties Express Authority...

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Liability to Third Parties Express Authority: Authority declared in clear, direct, and definite terms, orally or in writing (expressed) Equal Dignity Rule: If a contract being executed by an agent on the principal’s behalf is in writing, most states require that the agent’s authority must also be in writing; otherwise, the contract executed by the agent is voidable at the principal’s option. The equal dignity rule does not apply when the agent acts in the principal’s presence or when the agent’s act is merely perfunctory . Power of Attorney: A written document, usually notarized, authorizing an agent to act for a principal. Implied Authority: Authority that is (i) conferred by custom , a. bellman hands you your bags (ii) inferred from the position the agent occupies, or a. attorney
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(iii) inferred as being reasonably necessary to carry out express authority. a. If you tried to write everything out, every detail, it would take forever Apparent Authority: Authority that arises when a principal, by either words or actions, causes a third party to believe that an agent has authority to act, even though the agent has no express or implied authority to act with regard to the particular matter at hand. If the third party changes his or her position in reliance on the principal’s representations regarding the agent’s authority, the principal may be estopped from denying that the agent had authority to act. By contrast to agency-by-estoppel, where the principal may be estopped from denying that a non-agent is acting on the principal’s behalf, here the person acting on the principal’s behalf is an agent – just not one who has express or implied authority to act with regard to the particular matter at hand. Emergency Powers: When an unforeseen situation demands action to protect or preserve the property and rights of the principal, but the agent is unable to
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contact the principal, the agent has emergency authority to act on the principal’s behalf. Only to protect or preserve, doesn’t reach out beyond that.
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Ratification: The express or implied affirmation of a previously unauthorized contract made by a purported agent. In summary: (1) The agent must have acted on behalf of the principal who subsequently ratified the action; (2) The principal must affirm the agent’s act in its entirety ; (3) The principal must affirm before the third party withdraws from the transaction; and (4) The principal must have the legal capacity to affirm the transaction both (a) at the time the agent acts, and (b) at the time the principal ratifies; and (5) The principal must know all material facts
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